"We have not yet read the judgment, but the result raises questions about the EU's relationship to the rule of law," Olsson told TT.

Ahmed Yusuf Ali, originally from Somalia, had all his assets frozen in November 2001, after his name was included on a list of people with links to terrorists.

The list was compiled by the United Nations' security council and was incorporated into EU law by a directive from the European Commission, giving it immediate effect in member states.

Speaking through his lawyers, Thomas Olsson and Leif Silbersky, Ali said that he had not been given any opportunity to defend himself against the accusations of associating with terrorists. Nor had he been told why he was included on the list.

"A system has been introduced which leaves people without rights," says Olsson.

"It is a very regrettable judgment, and while Ahmed Yusuf loses, the big loser is the EU itself."

A crucial part of the judgment in Ahmed Yusuf's case, as well as in another case involving a Saudi with large assets in the EU, is that the sanctions are based on a UN security council decision. Such decisions cannot be overturned by the European Court of First Instance, the court ruled.

The court also ruled that the sanctions do not violate basic human rights.

The court noted that the EU, according to the Treaty of Rome, has the right to impose sanctions on third countries. It ruled that this also applied to individuals in the fight against terrorism.

Public international law dictates that members of the international community have duties under the UN convention that take precedence over all other considerations, including the European Convention on Human Rights and EU treaties.

These duties apply not only to EU member states, but also to EU institutions, according to the court.

The judgment means that the court believes that the sanctions against Ahmed Yusuf's organisation, Al Barakaat International, were correctly applied.

Ahmed Yusuf's lawyers now plan to appeal to the European Court of Justice (ECJ).

"We are convinced that we will win if the law is allowed to prevail. There is no doubt that these sanctions infringe Ahmed Yusuf's rights in a totally unacceptable way," says Olsson.

Olsson says that the case has a strong political dimension.

"Our hope is that those judges who will try the case will have the courage to stand up for their beliefs, and resist political pressure. We are fully confident that the ECJ will correct this mistake."

"The judgment indicates that this is all about politics and not law," says Abdirisak Aden, secretary general of the Swedish-Somalian institute and one of the three people initially covered by the sanctions.

Aden, who is also a Social Democrat politician, is demanding that the Swedish government acts "at the highest level" to get the sanctions lifted.

"The government is in reality partly responsible via the EU for securing these sanctions."

"If the government does nothing they are contributing to the psychological torture of Ahmed Yusuf. It is like Guantanamo."

"Everyone - the police, the FBI, are agreed that there is no link between as-Barakaat and terrorism. Now all those who believe in human rights must stand up for them. This has gone on too long, he told TT.